Broadcom’s earnings disappointment served as the catalyst for the sector’s decline, ending the S&P 500’s nine-week winning streak. Investors are now recalibrating expectations, with markets pricing in an 80% probability of a rate hike by year-end. Treasury yields are climbing as the prospect of aggressive monetary tightening gains traction, directly impacting the broader equity landscape.

Simultaneously, the U.S. labor market continues to show unexpected resilience, complicating the economic outlook. May payrolls increased by 172,000, more than doubling forecasts, while revisions for March and April added 93,000 jobs. With the unemployment rate holding steady at 4.3%, the economy is significantly outpacing the estimated breakeven rate of 50,000 jobs per month, fueling fears of overheating. As markets navigate these data points, corporate financing also faces scrutiny; companies like Alphabet and Meta are tapping equity markets to fund massive AI infrastructure investments, potentially straining liquidity despite a record pace of share buybacks.